We haven’t seen anything like this since the Great Depression of the 1930s. Leading up to this year, farm incomes had been trending lower for most of the past decade, and meanwhile, farm debt levels have been absolutely exploding.
So U.S. farmers were desperate for a really good year, but instead, 2019 has been a total disaster. As I have been carefully documenting, due to endless rain and catastrophic flooding millions of acres of prime farmland didn’t get planted at all this year, and the yields on tens of millions of other acres are expected to be way, way below normal. As a result, we are facing the worst farming crisis in modern American history, and this comes at a time when U.S. farms are drowning in more debt than ever before. In fact, the latest numbers that we have shown that the average U.S. farm is 1.3 million dollars in debt…
Debt-to-asset ratios are seeing the same squeeze, with more farms moving into a ratio exceeding 80%. Barrett notes each year since 2009 has seen an increase in the average amount of total debt among farmers, and 2017 was no exception. Average debt rose 10% to $1.3 million. The biggest increase was in long-term debt, such as land.
Farming in the 21st century has become an extraordinarily risky business, and countless U.S. farmers were already on the verge of going under even before we got to 2019.
Now that this year has been such a complete and utter disaster, many farms will not be able to operate once we get to 2020.
Minnesota farmers Liz and Bob Krocak were hoping for better days ahead as this year began, but things have been really tough and their debts have become overwhelming. During a recent meeting with their creditors, Liz was so distraught that she literally burst into tears…
They had to face their creditors at a mediation. There was Del, the mechanic, whom they owe $28,000 and who now can’t help his son buy a home. There was Steve, the feed store guy, who is 64 and has delayed his retirement because of the Krocaks’ $311,000 bill.